Sharper Image (NASDAQ:SHRP), a former Inc. 500 company, announced Tuesday that founder Richard Thalheimer has stepped down from his position as chairman and CEO.
The change in leadership comes at a time when the San Francisco-based company has taken a beating on Wall Street, while struggling with catalog, online, and retail-store sales. Despite cutting jobs and curbing new store openings, the company posted a $15.6 million loss for the year ending January 2006, and reported a 28% drop in same-store sales during the second-quarter of this year.
While the company's board of directors conducts an executive search, Jerry Levin will serve as chairman and interim CEO. Levin is also the chairman and CEO of JW Levin Partners, a New York-based firm that specializes in turnaround and brand rebuilding. Thalheimer will remain on the company's board.
"Sharper Image has a great brand name and strong customer base," Levin said in a statement. "Our immediate priority is to develop and implement a plan of action that takes full advantage of these fundamental strengths and addresses the operating issues facing the company."
Thalheimer founded Sharper Image, an electronics and personal-care retailer, in 1976. By 1982, the company was generating $27.9 million in sales and 4,259% five-year revenue growth, landing it at No. 15 on the Inc. 500, Inc. magazine's annual list of the fastest-growing private companies in America. Sharper Image went on to make the list three more times (No. 76 in 1983, No. 289 in 1984, and No. 400 in 1985) before Thalheimer took it public in 1987.
Analysts said they welcomed the shakeup. "It's good that they’ve taken some drastic measures," said Jason Kremer, an analyst with Caris & Company in San Francisco, which has an "average" rating on the stock.
"They will probably adopt a more consumer-centric approach, relying more on test panels and a scientific product-selection process, and focusing less on the promotion of one or two hit products," Kremer added, alluding to the company's flagship Ionic Breeze air purifier, which has experienced a sales slump.
Sharper Image shares jumped more than 10% on the news, closing at $10.33 on Tuesday -- still 37% below their 52-week high.